PPC ROI: Easy Way to Quickly Calculate Your Marketing Campaign

Calculating ROI is one of the most important aspects of digital marketing and helps you measure the effectiveness of your PPC Campaigns. If you want to have a successful marketing campaign, then you need to track the ROI of your PPC efforts to ensure that you're getting the most out of your investment. But how are you going to calculate your PPC ROI?

In this blog, we will help you how to quickly calculate your real PPC ROI. And by the end of this, you’ll be familiar with:

• ROI or Return on Investment
• Profit Per Click and Per Impression
• Effective Method to Use

Calculate Your ROI

ROI is an acronym for “return on investment.” It measures the amount of money you gained from your ads or free product listings relative to the amount of money you’ve spent. 

According to Google, “ROI is the most important measurement for marketers because it shows the real effect of a campaign on your business, and gives you an overview on how ads and listings contribute to the success of your business.”

So, how can you calculate your ROI?

In the digital marketing industry, marketers usually use the term return on investment or ROI, but they are referring to return on ad spend or ROAS. This is the formula you can use to compute the ROI:

(PPC ROI revenue - PPC ROI cost)/PPC ROI cost x 100 = ROI %

For example, you have a pay per click (PPC) sales of $4,000, and you have invested $2,000 for your pay per click campaign. To compute your ROI, you just need to minus your sales from the amount of money you invested and divide it again by the money you spend. Your answer should be multiplied by 100 and converted to a percentage.

($4,000 revenue - $2,000 cost)/$2,000 cost = 1 x 100 = 100%

In this example, your return on ad spend will be 100%.

Calculating your ROI is very simple, and you can do this very quickly by just using a calculator and analyzing the results of your PPC campaign. 

Measure Your Profit Per Click and Per Impression

Maybe you are wondering what is PPC or profit per click since you’ve been encountering that term in calculating your return on investment (ROI). 

In digital marketing, profit per click (PPC) or profit per impression (PPI) is the amount of money earned by an advertiser after one ad click or one thousand impressions. This is usually used to measure the effectiveness of the online advertising campaigns of most businesses.

The first thing you need to do is to get the data on your clicks, impressions, total cost, and total cost. Once you gathered the needed data, this is the formula you can use to measure your profit per click/impression:

Profit per click or impressions = (profit - cost)/number of clicks or impressions

If you want to know your profit, you can also calculate it by subtracting the total cost you’ve spent from the total sales. After you do this, you now have an idea about your profit.

What is the Most Effective Method?

The digital marketing industry is unpredictable so you should always be ready to take a risk and face the results of your campaigns. Remember there are no ways you will know that you are getting the value of the money you invested, but thankfully, there are now ways you can use to analyze your marketing campaigns.

The most effective method depends on where you are comfortable and what is working for you. Don’t use a method that you don’t understand, and just stick to one method.

Keep in mind that measuring your success is very important, especially if you want to reach more of your target and increase your sales. Once you’ve understood how to calculate your PPC ROI, you won’t have any trouble measuring the success of your campaign.